How Leadership Matters: The Effects of Leadership Alignment on Strategic Execution

How Leadership Matters: The Effects of Leadership Alignment on Strategic Execution

By Charles A. O’Reilly, David F. Caldwell, Jennifer A. Chatman
2005Working Paper No. 1895

Leadership has been a central, and sometimes controversial, topic in the study of organizations. In spite of claims to the contrary, there is substantial evidence that leadership is positively related to a variety of individual and organizational outcomes. While research has confirmed that leadership-performance associations exist, less attention has been paid to how senior leaders ensure that their strategic decisions are implemented. In this study, we investigated one mechanism of action, exploring how the consistency of leadership effectiveness across hierarchical levels enhanced or impeded influenced the implementation of a strategic initiative in a large health care system. We found that medical department performance was not affected by any one leaders (CEO, medical center leader, department leader) effectiveness but rather, it was only when leadership effectiveness at different levels were considered in the aggregate that significant performance improvement occurred. We discuss the implications of these findings for leadership research, specifically, that leaders at various levels should be considered collectively to understand how leadership influences strategic change.

Keywords
strategic implementation, organizational change, leadership, change management